IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

Yes

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 22 Jul 2019 | Removal date: open ended

Public procurement localisation

In a memorandum to the secretary of defense on July 22, 2019, President Trump determined, pursuant the Defense Production Act of 1950, that “the domestic production capability for separation and processing of Light Rare Earth Elements is essential to the national defense.” More precisely,

Without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the production capability for separation and processing of Light Rare Earth Elements adequately and in a timely manner. Further, purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need for this critical capability.

This is one of a series of such orders that the president signed that same day on a range of related products, each of which fall within the general category of rare earths and their products. Rare earths consist of seventeen metallic elements that include the fifteen lanthanides on the periodic table of the elements, plus scandium and yttrium. These goods are considered vital to many modern technologies, including (among others) national defense, consumer electronics, computers, and communications.

The relevant section of the Defense Produnaction Act of 1950 grants the president an array of authorities. It provides that “[t]o create, maintain, protect, expand, or restore domestic industrial base capabilities essential for the national defense, the President may make provision” as follows:

(A) for purchases of or commitments to purchase an industrial resource or a critical technology item, for Government use or resale;

(B) for the encouragement of exploration, development, and mining of critical and strategic materials, and other materials;

(C) for the development of production capabilities; and

(D) for the increased use of emerging technologies in security program applications and the rapid transition of emerging technologies —

(i) from Government-sponsored research and development to commercial applications; and

(ii) from commercial research and development to national defense applications.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

342 Basic inorganic chemicals n.e.c.
2805 Alkali or alkalineearth metals; rareearth metals, scandium and yttrium, whether or not intermixed or interalloyed; mercury.
280530 Rareearth metals, scandium and yttrium, whether or not intermixed or interalloyed
2846 Compounds, inorganic or organic, of rareearth metals, of yttrium or of scandium or of mixtures of these metals.
284610 Cerium compounds
284690 Other

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